Y2K-BASED COMPUTER FIRMS PLANNING FOR POST-MILLENNIUM

Bob Hagaman remembers his Y2K nightmare vividly.
'It was the Year 2000 and I was running down the street, pulling my hair out over what to do,' Mr. Hagaman said.
That fitful night's sleep 12 months ago wasn't worry over an apocalyptic end of the world, but rather what Keane Inc.'s office in Independence would do when the calendar turned and the rush of work for Y2K software conversions ended.
The Boston-based information technology firm established a 'Y2K factory' three years ago in Independence, with 200 employees cranking out software codes for clients to avoid computer glitches caused by the year 2000. Last year, 70% of the work done in that office was for Y2K, said Mr. Hagaman, director of the local office.
Upon waking from his dream, Mr. Hagaman immediately sat down and started writing a plan to recreate Keane for the new millennium. He said his strategy, which revolves around the newest computer phenomenon -- electronic commerce -- will ensure Keane's local employment grows rather than shrinks next year.
Mr. Hagaman said he will hire 100 people over the next nine months. He also has just finished retraining employees in the intricacies of the Internet, business consulting and web design.
'We're going to stake our claim as Internet experts,' Mr. Hagaman said. Indeed, Keane's Cleveland practice is now the source for e-commerce training and marketing literature for the entire company, which has $1.2 billion in annual revenues and 40 offices nationwide.
People such as Mr. Hagaman are hard to find in Greater Cleveland, because few computer consulting firms admit to jumping on the Y2K bug with all their might. The costs of staffing up and training for a short-term service, and the risk of a flood of Y2K-related lawsuits, discouraged big-name consulting firms from doing too much Y2K work.
'If you train people to crank out code, you have to either retrain or lay them off,' said Eric Jackson, spokesman for Chicago-based Andersen Consulting, which emplo
ys 450 here. Mr. Jackson said Andersen Consulting made a decision in the early 1990s not to take on too much Y2K work for those reasons.
Even Ernst & Young LLP, which hired 1,000 people nationwide to handle Y2K jobs, only accepts projects for its top-tier clients. Much of the Year 2000 work done for Cleveland-area companies was sent to so-called Y2K factories in Costa Mesa, Calif., and Chicago, or was farmed out to companies in Israel and India, said Rick O'Callaghan, assistant director for E&Y's local practice.
'We went into it reluctantly because of the risks,' Mr. O'Callaghan said. 'There's a big lawsuit scare, and people are assessing the risk as far as what happens if everything falls apart.'
A number of local computer consulting firms planned for, but never saw, a rush of business for the Year 2000 problem. Steve Sweetnich, a regional executive vice president of Computer Associates International, said many business clients simply replaced computers instead of converting their software. Others, he said, may have simply ignored the problem.
'I think there are a lot of people out there who haven't done anything yet' to prepare for Y2K, Mr. Sweetnich said.
Bill Weil, owner of Crystal Consulting Co. a 10-person consulting firm in Woodmere, is among those still waiting for a Y2K boom.
Crystal Consulting started its Y2K practice last year targeting small and medium-size businesses as customers. The response from clients has been minimal and the practice hasn't expanded beyond one person, Mr. Weil said.
'The business may not be gone,' he said. 'Maybe when Jan. 1, 2000, comes, maybe that's when the work is really going to hit us.'